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Tech & Science
Elon Musk expedited SpaceX’s IPO, raising $75 billion through a strategic move linked to the company’s pivot to artificial intelligence.
Elon Musk hastened the initial public offering (IPO) of SpaceX, marking the largest IPO in market history, according to Bloomberg. This acceleration was driven by a calculated strategy to secure substantial funding following the company’s unexpected shift toward artificial intelligence (AI), resulting in $75 billion raised and making Musk the world’s first trillionaire.
Bloomberg reported that over the past six months, Musk and his executive team urged their staff to move swiftly. This urgency was part of a deliberate plan to launch the IPO before the upcoming U.S. midterm elections, during which a president supportive of Musk remains in office. The timing also aimed to preempt competitors OpenAI and Anthropic from capitalizing on investor enthusiasm for AI firms, as well as to complete the offering before Musk’s 55th birthday at the end of June.
The IPO culminated last Friday with SpaceX’s shares beginning to trade on the Nasdaq stock exchange. The shares surged 31% on their first day, closing at $160.95, which brought the company’s fully diluted market capitalization to $2.2 trillion. Bloomberg highlighted that SpaceX underwent its most significant transformation ever, aggressively shifting toward AI through a merger with Musk’s own X.AI, valued at $250 billion, followed by a surprise agreement granting SpaceX the right to acquire Cursor for $60 billion.
Musk has also promoted plans to build large data centers in space to support AI, utilizing Starship rockets. This initiative demands enormous funding, making the IPO essential, whereas previous plans had focused solely on spinning off the Starlink satellite internet service. The company targets an AI market valued at $26.5 trillion. Analysts cited by Bloomberg speculate about a potential merger between SpaceX and Tesla to avoid investor distraction, despite concerns about facing similar valuation challenges as the electric car manufacturer.
Bloomberg detailed that SpaceX engaged major banks including Goldman Sachs, Morgan Stanley, J.P. Morgan, Bank of America, and Citigroup as advisors. Although Morgan Stanley was Musk’s preferred bank, Goldman Sachs took the lead role in the IPO prospectus, leveraging a two-decade relationship with Musk. In an unprecedented move for major U.S. deals, Musk and SpaceX’s CFO, Bret Johnson, set a fixed share price of $135 instead of a price range, accelerating the process and enhancing transparency.
The IPO allocated $15 billion in shares, about 20% of the total, to retail investors who submitted orders exceeding $100 billion. Bloomberg cited an investor named Matt Frank, who requested 200 shares but received only 23, intending to hold them for future generations.
Bloomberg described the festive atmosphere on Wall Street, with banks decorating their offices with SpaceX rockets. Goldman Sachs executives wore custom green Nike sneakers inspired by Musk’s idea. CFO Bret Johnson and President Gwynne Shotwell rang the opening bell at Nasdaq, while Musk performed the same ceremony before thousands of employees in Texas. At the close of trading, officials gathered on Nasdaq’s balcony to watch the Times Square ball light up red like Mars and ascend into the sky.
The report concluded with a celebration hosted by J.P. Morgan CEO Jamie Dimon. Musk expressed that SpaceX has entered a “massive new growth phase requiring capital,” sharing his astonishment at the historic success. He remarked, “If someone had told me this would happen, I would have said you’re smoking something strong,” noting that he initially gave his company less than a 10% chance of success.
